Wheat's Jump Hints at Inflation Bellyache

By

Richard Barley

Updated Aug. 5, 2010 12:01 a.m. ET

Trouble down on the farm? Soaring wheat prices—September futures hit $7.11 a bushel Wednesday, up 58% from June's lows—are triggering fears of a repeat of 2008's food riots. But the real problems may lie further afield: in volatility and inflation.

A bit of perspective is necessary. Yes, record temperatures and droughts in Russia and other parts of Eastern Europe have destroyed crops. Russia has slashed its wheat harvest forecast, now 70 million to 75 million metric tons from 90 million, and the International Grains...